THE E-TAILING GROUP

HOW CONSUMERS SHOP WITH VIDEO – AND HOW TO SELL TO THEM

Housekeeping

• If you prefer to use your phone, select “Use Telephone.” Call in number: – Toll: 1-866-740-1260 – Access Code: 2794800 – Audio PIN: Shown after joining the meeting

• Questions will be answered in a brief Q&A session following the presentation. • A link to the recorded webinar will be sent to you following today’s presentation. the e-tailing group

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Today’s Presenters • Lauren Freedman President, the e‐tailing group

• Russ Somers Vice President Marketing, Invodo

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About Invodo

• Video solution for business at Web scale – Content to cover the catalog – Technology to deliver and measure ROI – Expertise to optimize the results

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Adoption of Video Drives Us to Learn More

• Video viewership has reached record numbers • Retailers have integrated videos into shopping experiences • Video consumption via mobile and social is gaining traction ……But • We wanted to explore what really matters, where real impact is being made and why the e-tailing group

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The Voice of Cross-Channel Merchandising Straight talk from “in-the-trenches” online merchandising experts

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16 years e-commerce consulting Fortune 500 client projects ranging from strategic planning, customer experience with an emphasis on merchandising to technology marketing and lead generation Extensive cross-category expertise with merchants B2C and B2B Proprietary research studies on mystery shopping, merchandising, mobile and consumer behavior Author, It’s Just Shopping 50+ years traditional retail and catalog experience the e-tailing group

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I. SURVEY METHODOLOGY AND DEMOGRAPHICS 7 the e-tailing group

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Survey Background

5 Survey Goals • Trend year/year video consumption (#’s, time spent, locations, categories, etc.) • Evaluate the evolving role and usage of onsite and offsite video locations • Explore product page consumption, perceived consumer value and desired elements • Understand video’s viewership across devices and channels along with consumer sharing sentiments • Review consumption beyond the website Survey Methodology • 1073 consumers completed an online questionnaire in (December, 2012) • 52% F/48% M • Shopped online 4+ times in the past year and spent at least $250 • 100% owned a smartphone/56% owned a tablet

8

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The Demographics In what age range do you fall?

18-24

7%

25-34

26%

35-44

26%

45-54

20%

55+

21%

Which of the following best represents your combined annual household income from all sources before taxes?

Under $25,000

5%

$25,000-$35,000

7%

$35,001-$50,000 What is the highest level of education that you have completed to date? Some high school or less High school graduate

Q4-7

Prefer not to say

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20%

$101,000-$150,000

8%

$151,000-$200,000

21%

More than $200,000

39%

Prefer not to say

8% 24%

Post graduate degree

22%

$75,001-$100,000

College graduate Some graduate school

$50,001-$75,000

0%

Some college, but no degree

14%

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18% 5% 6% 3%

II. THE TRENDS TELL THE TALE the e-tailing group

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1 in 3 have increased time spent and watch video all/most of the time they are encountered When you encounter product videos on retail or brand manufacturer sites, how often do you watch them? All the time Most of the time

14% 11% 21% 16% 32% 33%

Some of the time Once in awhile

20% 25% 2012

Rarely Q2/Q1

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13% 15%

2011

Answered:  2517 Never watched: 9.1%

Year-over-year slight increase in video consumption is seen Over the past three months, how many product videos have you watched on retailer or brand manufacturer websites?

10+

11% 9%

8-9

12% 9% 22% 18%

5-7

40% 45%

2-4 15% 19%

1

Q3/Q2

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2012 2011

The majority (74%) watch videos on information-intensive products or categories more than once before purchasing For information-intensive products or those categories where product education is important (TVs, computers, refrigerators, power tools, etc.), how many times would you typically view a product page video prior to making your final purchase?

1

26%

2

37%

3 4

5%

5 or more

5%

Never

5%

Q14

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22%

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2-3 minutes on average is spent on product/category videos How much time do you typically spend watching the following types of videos on a retail or manufacturer website? Videos that educate you about a particular category you are planning to purchase (how to buy a computer, selecting a refrigerator, etc.)

2.79

Product videos that include a demonstration

2.77

Videos supporting a brand's value proposition (Why buy a Dell computer, Why Shop Home Depot, etc.)

RATING AVERAGE LEGEND 6‐POINT SCALE

6

2.40

5 4 3

Product videos that talk about products but don't contain a demonstration

2

2.32

Q13

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1

>10 minutes 6‐10 minutes 3‐5 minutes 2‐3 minutes 1‐2 minutes 75%) Most of the time (75-50%)

5% 15%

Some of the time (50-25%) Limited amount of time (25%-10%)

21% 10%

Very little time (< 10%) Never (0%)

Q15

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28% 21%

41% of shoppers are more likely to share video found (vs. photos or written text) on a retailer’s product page How likely would you be to share video (versus photos or written text) that you might find on the product page of a retailer’s website?

Much more likely

12%

Somewhat more likely

29%

About the same likelihood Somewhat less likely

6%

Significantly less likely

6%

Q19

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47%

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Over 1 in 2 (52%) have shared a product video over the last 3 months 1 in 5 have shared 5+ times How many times have you shared a product video over the past 3 months? 7 or more 5-7 2-4 1 Never

Q20

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6% 13% 20% 13% 48%

Sharing standards include email, Facebook and YouTube

Via what means did you share product video? Check all that apply.

Email

71%

Facebook

48%

YouTube

42%

Twitter

11%

Vimeo

10%

Pinterest

6%

Q21

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IV. MOBILE AND SOCIAL DYNAMICS the e-tailing group

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PC reigns regarding video viewership though mobile including smartphones (43%) and tablets (35%) follow its lead In what locations or on what devices have you watched a product video over the past 3 months? Check all that apply. PC

81%

Smartphone Tablet Facebook

35% 32%

Video sharing site (YouTube/Vimeo)

29%

Retail store

11%

Twitter Q9

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43%

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8%

1 in 4 shoppers are consuming more video via mobile devices Which of the following best describes your consumption of videos via mobile devices versus desktops or laptops over the past 3 months?

Significantly more on mobile devices Somewhat more on mobile devices

9% 17%

About the same Somewhat less on mobile devices Significantly less on mobile devices

Q24

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42% 11% 21%

1 in 2 shoppers have watched at least 1 video on their smartphones while 1 in 4 have watched 5 or more over the past 3 months Over the past 3 months, how many product videos have you watched via a smartphone?

10 or more

5%

8-9

6%

5-7 2-4 1 None

Q25

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14% 20% 11% 44%

Smartphone video viewership provides a quick, valuable product overview; Associated convenience means in-store viewing, multichannel looks where subsequent behavior varies Please share your agreement or disagreement with the following statements regarding watching videos on your smartphone. Top-2: Strongly/Somewhat Agree Videos are perfect for smartphone viewing as I get a quick overview of the product

69%

Spending time watching product videos on my phone is more convenient than via my PC

58%

I often watch videos on my phone and then search out the products on my desktop or laptop for more details

58%

I watch videos on my phone when I’m in the store to get more information about a product prior to making a purchase

57%

I frequently scan a QR code while in the store and watch any associated video via my phone

55%

Watching videos on my phone gives me efficient access to valuable information but I rarely purchase the product

51%

After viewing a video on my phone, I typically need more information prior to making a purchase

50%

I can gather enough information from watching a product video on my phone to make a purchase Q26

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49%

58% have watched 2 or more videos via their tablets Over the past 3 months, how many product videos have you watched via a tablet device (iPad, Samsung Galaxy, Toshiba Excite, Google Nexus, etc.)? 10 or more

7%

8-9

7%

5-7

21%

2-4 1 None Universe: 720 tablet owners Q27

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23% 14% 28%

Tablet user experience is positive and productive Please share your agreement or disagreement with the following statements regarding watching videos on your tablet. Top-2: Strongly/Somewhat Agree Videos are perfect for tablet viewing since the experience is both enjoyable and productive

76%

Videos are perfect for tablet viewing as I get a quick overview of the product

65%

I can gather enough information from watching a product video on my tablet to make a…

62%

Spending time watching product videos on my tablet is more convenient than via my PC

61%

After viewing a video on my tablet, I typically need more information prior to making a… Watching videos on my tablet gives me access to valuable information but I rarely purchase… I often share product videos seen on my tablet with friends/family After watching videos on my tablet, I often purchase that product or a comparable… I often watch product videos on my tablet with friends/family Q28

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59% 54% 52% 50% 47%

Tablet Universe: 516

Similar tablet/smartphone sentiments are seen except that tablet viewers are more poised to purchase Please share your agreement or disagreement with the following statements regarding watching videos on your mobile device. 69% 65%

Videos are perfect for quick overview of the product Spending time watching product videos more convenient than via my PC I often watch videos on my mobile device then search out the products on my desktop or laptop for more details Watching videos on my mobile device gives me efficient access to valuable information but I rarely purchase the product I can gather enough information from watching a product video on my mobile device to make a purchase

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58% 61% 58% 59% 51% 54% Smartphone

49% 62%

Tablet

VIDEO AS A REVENUE-GENERATING PROGRAM

Site Visitors

Video SKU Coverage Video Impacted Visitors

Video Viewers Video Assisted Conversions Incremental Revenue

ROI - PROGRAMMATIC MEASUREMENT

A

B

Product Page No Video

Product Page With Video CTA

Control Group Conversion Rate

Viewer Conversion Rate

Non-Viewer Conversion Rate

2.0%

12%

2.0%

Total Experiment Conversion Rate: 3.0%

WHAT IS “RETURN ON PRODUCTION?”

Search Engines Email

Your Website

In-Store

Catalogs

Mobile

Channel Partners

Social Media

FOUR SEPARATE ARENAS

INVODO: EXPERTISE IN FOUR ARENAS

Video Strategy Session

Pre-Production

Best Practices Production Optimization Editing/Post SEO Social & Mobile Syndication

Content Management Hosting & Streaming Measurement

THANK YOU Lauren Freedman LF@e‐tailing.com 773‐975‐7280 www.e‐tailing.com

the e-tailing group

Russ Somers [email protected] @rsomers 512‐279‐4800 www.invodo.com

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